The dark clouds will disperse? Travel demand rebounds, boosting confidence, United Airlines (UAL.US) raises full-year profit target.

After experiencing a downturn caused by several months of flight delays, trade tensions, and conflicts in the Middle East, United Airlines (UAL.US) has raised its profit forecast for this year due to the resurgence in travel demand, injecting a sense of optimism into the market. The company released its second-quarter financial report after the market closed on July 16th, with quarterly revenue increasing by 1.7% to $152.4 billion, falling short of analysts' expectations; adjusted earnings per share were $3.87, exceeding Bloomberg analysts' expectations of $3.84. United Airlines expects adjusted earnings per share for the third quarter to be between $2.25 and $2.75, higher than analysts' expectations of $2.65. The company also stated that it has set the full-year adjusted earnings per share forecast range at $9 to $11. As of Wednesday, analysts' average estimate for the company's 2025 adjusted earnings per share is $9.92. The Chicago-based airline, along with Delta Air Lines, Inc. (DAL.US), are optimistic about full-year performance, noting a double-digit increase in business travel demand since this month compared to the second quarter. Delta Air Lines, Inc. stated last week that consumer concerns about economic uncertainty have eased following the approval of President Donald Trump's tax cuts and spending plans, as well as progress in tariff negotiations, leading to a gradual recovery in domestic travel in the United States. United Airlines CEO Scott Kirby stated in a release, "Global uncertainty has decreased compared to the first half of 2025, giving us confidence in a strong finish to the year." In April of this year, United Airlines provided a full-year earnings per share forecast range of $7 to $13.50, depending on whether the United States would slip into a recession due to the global trade reshaping actions of the Trump administration, or if demand stabilizes at a higher level. As of the closing, United Airlines stocks fell by 1.8% to $86.86. The company's stock has fallen approximately 9% year-to-date, while the S&P 500 index has risen by about 6% during the same period. United Airlines announced plans to reduce capacity in mid-August, which may help boost ticket prices. The company's unit non-fuel costs (an efficiency measure) rose by 2.2% year-on-year this quarter. In the second quarter, United Airlines saw a 5.6% year-on-year increase in revenue from premium cabins, while revenue from the cheapest basic economy cabins increased by 1.7%. Bloomberg Intelligence analyst George Ferguson pointed out in a report that average fares and unit revenue for all major markets of United Airlines showed declines in the second quarter, confirming the soft demand at that time. He stated, "This serves as a warning again that low-cost airlines focusing on basic economy fares may face worse performance."